Martin Lewis: Winter fuel payment changes 'big improvement'
The payment, worth up to £300, will be restored to the vast majority of pensioners who previously received it because anyone with an income of under £35,000 a year will now get the payment automatically.
Martin Lewis tweeted: Winter Fuel Payment to be reinstated for all State Pensioners this winter, but then clawed back via tax system for all who earn over £35,000 (roughly average earnings). This is a big improvement. Full instant analysis video coming with all the details in a minute. #WinterFuelPayment
NEWS. Winter Fuel Payment to be reinstated for all State Pensioners this winter, but then clawed back via tax system for all who earn over £35,000 (roughly average earnings). This is a big improvement. Full instant analysis video coming with all the details in a minute.… — Martin Lewis (@MartinSLewis) June 9, 2025
The full details were announced here.
Devolved authorities in Scotland and Northern Ireland will each receive a funding uplift so they too can meet the new threshold.
Pensioners who do not want to receive the payment will be able to opt out, according to the Treasury.
The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour's first acts in Government, aimed at balancing what was described as a £22 billion 'black hole' in the public finances.
This meant the number of pensioners receiving the payment was reduced by around 10 million, from 11.4 million to 1.5 million.
The Treasury claims the new arrangement will cost £1.25 billion in England and Wales, while means-testing winter fuel will save the taxpayer £450 million.
Chancellor Rachel Reeves said: 'Targeting winter fuel payments was a tough decision but the right decision because of the inheritance we had been left by the previous government.
'It is also right that we continue to means test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
'But we have now acted to expand the eligibility of the winter fuel payment so no pensioner on a lower income will miss out.
'This will mean over three-quarters of pensioners receiving the payment in England and Wales later this winter.'
Video done, just working on adding subtitles, then it'll be up, it answers most of the questions i'm seeing https://t.co/tj8y4LKBCZ — Martin Lewis (@MartinSLewis) June 9, 2025
Those with an income above this threshold will also receive the payment, but it will then be reclaimed from them in tax.
To be eligible for the winter fuel allowance, a person will need to have reached state pension age by the week starting September 15 this year.
Some two million pensioners who earn more than £35,000 will see their winter fuel payments clawed back via the taxman, the Treasury estimates.
But, Kemi Badenoch, Leader of the Opposition, claimed the Prime Minister had 'scrambled to clear up a mess of his own making'.
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Liberal Democrat Leader Sir Ed Davey said: 'Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated.
'Countless pensioners were forced to choose between heating and eating all whilst the Government buried its head in the sand for months on end, ignoring those who were really suffering.
'We will now study the detail of this proposal closely to make sure those who need support actually get that support. The pain they went through this winter cannot be for nothing.'
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